Laura Sharman 11 October 2019

Hike in PWLB rate will cost councils £70m a year

The 1% increase to the Public Works Loan Board (PWLB) rate will cost councils £70m a year, town hall chiefs have warned.

In a letter to chief finance officers, the Treasury hiked the interest rate charged on loans to local authorities by one percent, taking the interest rate from 1.8% to 2.8% with immediate effect.

The Local Government Association (LGA) warned the increase will significantly increase the cost of borrowing for councils and put capital schemes at risk.

A spokesperson for the LGA said: 'This 1 per cent PWLB rate increase could cost councils an extra £70 million a year for borrowing to be undertaken in the next year.

'It presents a real risk that capital schemes, including vital council house building projects, will cease to be affordable and may have to be cancelled as a result.'

Regeneration company Be First called the decision 'dysfunctional' and warned it will hit public housing projects hard.

Managing director Pat Hayes said: 'It’s a dysfunctional decision by the Johnson led Government - it looks like the left hand doesn’t know what the right hand is doing.

'Boris Johnson promised to put ‘rocket boosters’ under the economy to boost economic growth in preparation for Brexit. But the reality is that the Treasury is choking off funding for badly needed housing and public infrastructure projects.'

Visit The MJ (£) for more on this story.

SIGN UP
For your free daily news bulletin
Highways jobs

Benefits Officer

Wealden District Council
£24,409 - £32,858 p.a (dependant on experience and development milestones)
We are looking for an experienced Benefits Officer to join our team. Hailsham, East Sussex
Recuriter: Wealden District Council

Practitioner - Our Greenwich Schools Support Hubs

Royal Borough of Greenwich
£42,840 - £46,041
The Royal Borough of Greenwich is an exciting and fulfilling place to work. Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Chargehand Driver HGV x6

Royal Borough of Greenwich
£36,100 - £37,384
Street Services provides a highly important service to all the borough’s residents and visitors Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

GDA Payments Apprentice

Royal Borough of Greenwich
£25,854
The Payments Services Team is in the Directorate of Finance & Legal Services Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Library & Neighbourhood Hubs Representative

Rotherham Metropolitan Borough Council
£23,893 pro rata (Pay award pending)
We are currently seeking to recruit a highly motivated individual with a passion for delivering the very best customer service. Rotherham, South Yorkshire
Recuriter: Rotherham Metropolitan Borough Council
Linkedin Banner

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.